ndia's new Prime Minister Narendra Modi arrived in Tokyo on Saturday for a four-day official visit to Japan, with the relationship poised to be energised and substantively upgraded. The visits last year by Japan's Emperor and Prime Minister paved the way for a potentially vibrant, strategic partnership. Prime Minister Modi's personal rapport with Japanese Premier Shinzo Abe, after his first visit to Japan in 2007, will provide an impetus as will the shared concerns about China's territorial ambitions.

India and Japan share common strategic interests. In addition, India offers Japan a vast untapped market; a safe and stable destination for investment and establishing manufacturing enterprises including for re-export; a huge young human resource reservoir; and assured benefits from investments in its infrastructure. Additionally, Japan carries no historical baggage that could hamper its dealings with India.

The present two-way trade between India and Japan of $18.51 billion can easily be doubled within five years and Japanese investments, which in Gujarat alone are expected to touch $2 billion by 2015-16, should similarly be boosted. Other important areas of cooperation, where a beginning has been made, include defence-related dual-use technology and production, hi-tech ventures, and advanced electronics, to encourage which India should offer easy, liberal terms. Such cooperation will help balance disproportionate Chinese investments and products in the Indian economy.

Hanging as an uncomfortable backdrop to Modi's visit to Japan are China's claims in the South China Sea which have sharply escalated tension in the region. China's claim over 3 million square kilometres of the South China Sea is actually an attempt to establish its pre-eminence in the region. China first applied military and economic pressure on the Philippines to secure sovereignty over some islands in the South China Sea. In the absence of adequate support from the US, the Philippines opted for international arbitration to safeguard its sovereignty and maritime territorial rights. Beijing at the same time chose to follow a two-track policy towards Vietnam. While the Chinese Communist Party (CCP) sought to retain warmth in its relations with the Communist Party of Vietnam (CPV), Chinese armed ships clashed at sea with Vietnamese Navy vessels. Reliable reports state that Chinese ships regularly receive instructions directly from Beijing, thereby confirming that operations are conducted with approval of the highest echelons of the Chinese leadership.

Ties between China and Japan have been particularly strained on the issue of sovereignty over the Senkaku (called Diaoyu in Chinese) Islands. After having starved Japan of vital supplies of rare earths and minerals four years ago, China steadily intensified diplomatic and military pressure on Japan and has declined to talk to Prime Minister Shinzo Abe. The continuing tense stand-off with Japan, which is a US ally and East Asia's strongest power, as well as confrontations in the sea and air with US ships and surveillance aircraft, underline Beijing's determination to push for dominance over the Asia-Pacific. China appears to have assessed that the US, Japan and Vietnam will stop shy of confronting it militarily.

The state-owned Global Times, a subsidiary newspaper of the CCP's official mouthpiece People's Daily, recently made a revealing comment while responding to US accusations of "dangerously rash" actions by a Chinese J-11 fighter jet against a US Navy P-8 surveillance aircraft on 19 August. The Global Times observed: "The US military has the power to sustain the US dominance internationally, but it is unable to command every country or nation. In East Asia, the US doesn't have the determination to be fully committed to things that are not in its core interests." The comments reflect Beijing's assessment that China's actions in the past few years have dented US credibility in the region as a reliable ally willing to back its treaty partners.

In 2010, when the US and South Korea were to conduct their largest-ever joint naval exercises, the Chinese state-owned media drew India into the South China Sea dispute and warned that history had imposed limits on the extent to which China's relations with India and Japan could develop. They also separately observed that China would ultimately have to resort to force to resolve outstanding territorial disputes when it would have to choose between India and Japan. In that event, it would choose the bigger of the two, India. Warnings were also issued to an Indian survey vessel and an Indian Navy warship while they were in international waters in the South China Sea.

Convinced that the US along with Japan, the Philippines and Vietnam are trying to contain China, Beijing has been apprehensive about the growing warmth in Indo-US ties. This was an important reason why China's leaders wanted to engage with Modi promptly after his election victory. Beijing is equally anxious about Modi's visit to Japan and will be closely monitoring it, especially for statements on the South China Sea and support for Japan.

Pertinent in this context is that quiet contacts between Japanese politicians and Chinese leaders continue to take place. On 15 July, for example, Banri Kaieda, president of the Democratic Party of Japan, met Chinese Politburo Standing Committee member Liu Yunshan. More important is the planned visit of Ms Li Xiaolin, daughter of former Chinese President Li Xiannian, who is a school friend of current Chinese President Xi Jinping and the head of the Chinese People's Association for Friendship with Foreign Countries, to Osaka on 22-23 September and the possibility of it being extended till 7 October to see a ballet in Tokyo.

Meanwhile, China's foreign policy is acquiring a sharper and more muscular edge that will impact India and Japan. In the intense debate underway in China for the past couple of years on China's international security environment, arguments advocating an uncompromising approach appear to be gaining ground.

These are reflected in the views of Tsinghua University's Prof Yan Xuetong, a former doctoral tutor of Xi Jinping. Notable among the views listed recently by Dingding Chen in the Diplomat are: as the probability of conflict with other countries increases, China's foreign policy should directly confront rather than avoid the issue of conflict; and China should begin to shape rather than just integrate into international society because China now has the capacity to do so. Also recommended are the jettisoning of some "myths" including, that China should keep a low profile; China should not seek leadership; China will not become a superpower; and that the Sino-American relationship is the most important one.

In this backdrop, the timing of Prime Minister Modi's visit to Japan is significant and will be of mutual benefit. It will give both countries added strategic flexibility while meeting imperative domestic economic needs, the importance of which has been repeatedly highlighted by the Indian Prime Minister.

The author is a member of the National Security Advisory Board and former additional secretary in the Cabinet Secretariat, Government of India. He is president of the Centre for China Analysis and Strategy, New Delhi. The views expressed are personal.